THE $2 billion contract for 46 MRH 90 European-built multi-role helicopters is a "project of concern".

Military sources say the project will be added to the Government's so-called "projects of concern" list if the Minister for Defence Materiel, Jason Clare, accepts the recommendation of the latest "diagnostic review" of the project.

So far just 13 of the 46 machines have been accepted by Defence and the delivery schedule is running more than 18 months late.

A source said the chopper still had major problems with its navigation systems and the review would recommend that it be added to the list of shame.

The MRH 90 will be the second helicopter project to make the shame list after the Sea Sprite Navy helicopter debacle that cost taxpayers more than $1 billion before it was abandoned.

There are nine projects on the list, ranging from submarine sustainment to stand-off missiles and all companies involved, including multi-nationals such as Boeing and Lockheed Martin, are barred from further taxpayer-funded contracts until their project is removed from the list.

The high-tech fly-by-wire composite twin-engine MRH 90 helicopter is built by European giant Eurocopter.

It is assembled in Brisbane by its subsidiary Australian Aerospace.

The project has been dogged by serious technical issues including an engine failure due to overheating, cracked windscreens, soft cargo flooring and avionic and navigation problems.

It is the latter that continues to cause problems, especially for the navy variant when the choppers are operating from ships.

According to insiders, the MRH 90 will be a very capable helicopter once all the bugs are ironed out, but it is another example of taxpayers funding untested cutting-edge military technology.

Despite its small relative size, Defence has lost billions of dollars and suffered countless delays over the years by signing up for unproven cutting-edge equipment.

It is understood that the Government and Australian Aerospace are about to sign an agreement with a new timetable for fixing the outstanding faults and getting deliveries back on track by March next year.